Malaysia is unfazed by China, U.S. semiconductor competition, minister says

Published

2 weeks ago

April 18, 2024

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KUALA LUMPUR, MALAYSIA – 2018/01/24: A foreigner is seen with a Malaysia flag as a background. Kuala Lumpur or commonly known as KL is the national capital for Malaysia and is the fastest growing metropolitan regions in South-East Asia. The urban city is also well known to the world for tourism and shopping. Kuala Lumpur has a great public transportation for people travel around the city. (Photo by Faris Hadziq/SOPA Images/LightRocket via Getty Images)

Faris Hadziq | Sopa Images | Lightrocket | Getty Images

Malaysia isn’t fazed about competition from China or the U.S. as it pushes into higher-end semiconductor manufacturing, according to the country’s second finance minister.

“The semiconductor space is now in the upcycle — and Malaysia will be a beneficiary of that,” Amir Hamzah Azizan told CNBC’s Karen Tso at the IMF spring meetings in Washington on Wednesday.

He also noted the country doesn’t see China — which is Malaysia’s largest trading partner today — as a rival in the sector.

“I think the reality of it all is, there is enough growth that will go around. So, everybody will get some pickups on that one,” he said.

If anything, Amir Hamzah explained, the recent geopolitical tensions have shown it is critical for supply chains to remain robust.

“We’re seeing a lot of end users now diversifying their supply chain. Our focus, actually, is to provide a very vibrant, strong supply chain connectivity, and make sure that we ride on that.”

Competing with U.S.

Malaysia appears to be benefitting from U.S.-China trade tensions, which has prompted companies to diversify their semiconductor operations. The country is now focused on shifting away from the back end of the chip supply chain production and moving up the value chain.

The country holds 13% of the global market for chip packaging, assembly and testing services, the Malaysian Investment Development Authority said in a Feb. 18 report. The government is also boosting efforts to grow its semiconductor ecosystem and attract investments.

While the U.S. is ramping up investments in chips, Amir Hamzah highlighted Malaysia offers a different value proposition.

“I think where Malaysia competes in, we’re not going to go head on to the tail end of the high-end competition, where maybe the U.S. is bringing all the parts,” he said, adding “therefore, I don’t think it’s a big challenge for us.”

The country is focusing on “extending their value chain” to attract new businesses and strengthen its position in the space, he said.

“At the end of the day,” the minister added, its “about economies of scale.”

Technology

Amazon beats on top and bottom lines, driven by growth in cloud and digital ads

Published

9 hours ago

April 30, 2024

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Amazon beats on top and bottom lines, driven by growth in cloud and digital ads

Amazon reported better-than-expected earnings and revenue for the first quarter, driven by growth in advertising and cloud computing. The stock ticked higher in extended trading.

Here’s how the company did:

Earnings per share: 98 cents vs. 83 cents expected by LSEG
Revenue: $143.3 billion vs. $142.5 billion expected by LSEG

Wall Street is also looking at these key numbers:

Amazon Web Services: $25 billion vs. $24.5 billion in revenue, according to StreetAccount
Advertising: $11.8 billion vs. 11.7 billion in revenue, according to StreetAccount

Operating income soared more than 200% in the period to $15.3 billion, far outpacing revenue growth, the latest sign that the company’s cost-cutting measures and focus on efficiency is bolstering its bottom line. AWS accounted for 62% of total operating profit. Net income also more than tripled to $10.4 billion, or 98 cents a share, from $3.17 billion, or 31 cents a share, a year ago.

Sales increased 13% from $127.4 billion a year earlier.

Amazon expects a continued jump in profitability for the second quarter but at a more measured pace. The company said operating income will be $10 billion to $14 billion, up from $7.7 billion a year earlier.

Revenue in the current quarter will be $144 billion to $149 billion, Amazon said, representing growth of 7% to 11%. Analysts were expecting growth of 12% to $150.1 billion, according to LSEG.

Sales at AWS accelerated 17% in the first quarter to $25 billion, topping Wall Street’s forecast for sales growth of 12% to $24.5 billion. For the past year, growth in AWS has slowed, as businesses trimmed their cloud spend. But Amazon executives have said they’re seeing cost optimizations taper off, and they’ve indicated that demand for generative artificial intelligence can be a boon for its cloud business.

Amazon’s earnings growth has been driven in part by widespread cost-cutting, tweaks to its fulfillment operations, and the stabilizing of cloud spending. CEO Andy Jassy has become more disciplined in the company’s spending, while growing profitable services like advertising, cloud computing, Prime memberships and its third-party marketplace.

The company has laid off more than 27,000 employees since late 2022, with the cuts bleeding into 2024. During the first quarter, Amazon let go hundreds of staffers in its health and AWS businesses.

Amazon’s advertising unit saw sales surge 24%, just ahead of consensus estimates. It’s the first report since Amazon started running ads in Prime Video, a move analysts predict could generate significant revenue over time.

The company’s ad business, which grew faster than retail or cloud computing, has become an increasingly important profit driver for Amazon and has emerged as a main player in online advertising.

That market overall started growing again after a brutal 2022, when brands reeled in spending to cope with inflation and rising interest rates. Meta, Snap and Google parent Alphabet all reported first-quarter results last week and showed better-than-expected revenue growth, which was primarily driven by improvements across their ad businesses.

Revenue from third-party seller services, which includes commissions collected by Amazon, fulfillment, shipping fees and other charges, continued to surge. Sales in the unit grew 16% year over year to $34.5 billion.

Amazon remains a standout among mega-cap internet companies in that it’s yet to implement a quarterly dividend, even as cash and equivalents jumped to $73.9 billion in the quarter from $54.3 billion a year earlier. Meta announced its first dividend in February at 50 cents a share, and Alphabet followed, telling investors last week that it will start paying a dividend of 20 cents a share. Those companies also announced plans to buy back tens of billions of dollars in stock.

This story is developing. Check back for updates.

Technology

Super Micro pushes up full-year revenue forecast as it points to strong AI demand

Published

10 hours ago

April 30, 2024

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Super Micro pushes up full-year revenue forecast as it points to strong AI demand

Lisa Su, chair and CEO of Advanced Micro Devices, left, and Charles Liang, CEO of Super Micro Computer, speak at the AMD Advancing AI event in San Jose, California, on Dec. 6, 2023.

David Paul Morris | Bloomberg | Getty Images

Super Micro shares slipped 8% in extended trading on Tuesday after the server maker reported slightly less revenue than expected for its fiscal third quarter, even as it gave optimistic revenue guidance.

Here’s how the company did in comparison with LSEG consensus:

Earnings per share: $6.65 adjusted, vs. $5.78 expected
Revenue: $3.85 billion, vs. $3.95 billion expected

The company’s revenue jumped 200% year over year in the quarter, which ended on March 31, according to a statement. That compared with a 103% increase in the previous quarter. Net income came out to $402.5 million, or $6.56 per share, compared with $85.8 million, or $1.53 per share, in the year-ago quarter.

CEO Charles Liang said in the statement that Super Micro is bumping up its fiscal 2024 revenue guidance to $14.7 billion to $15.1 billion from $14.3 billion to $14.7 billion. Analysts surveyed by LSEG had expected $14.60 billion.

Notwithstanding the after-hours move, Super Micro stock is up 205% so far this year, while the S&P 500 stock index has gained 6%.

The company goes up against with legacy IT equipment providers such as Hewlett Packard Enterprise. But last year, investors were keen to bet that Super Micro could become a key provider of servers containing Nvidia graphics processing units for working with artificial intelligence models, pushing up the stock 246%. Liang said in the statement that he expects Super Micro to keep taking market share.

In March, Super Micro took the place of Whirlpool in the S&P 500.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: A quiet meme stock rally? Reddit, GameStop and Super Micro surge

Technology

Pinterest shares soar 16% on earnings beat, strong revenue growth

Published

10 hours ago

April 30, 2024

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Pinterest shares soar 16% on earnings beat, strong revenue growth

Sopa Images | Lightrocket | Getty Images

Shares of Pinterest popped 16% in extended trading Tuesday after the company reported first-quarter results that beat analysts’ estimates and showed its fastest revenue growth since 2021.

Here’s how the company did, compared to LSEG analyst expectations:

Earnings per share: 20 cents adjusted vs. 13 cents expected
Revenue: $740 million vs. $700 million expected

Revenue for the quarter jumped 23% from $602.6 million a year earlier. Pinterest’s net loss for the first quarter narrowed to $24.8 million, or a 4 cent loss per share, from $208.6 million, or a 31 cent loss per share, a year earlier.

Pinterest reported 518 global monthly active users (MAUs) for the first quarter, up 12% year over year. Wall Street was expecting MAUs 504.9 million, according to StreetAccount. Pinterest said Generation Z is its fastest-growing, largest and most engaged demographic on the platform.

The company’s average revenue per user was $1.46 for the period, while StreetAccount was expecting $1.40 per user.

In its first-quarter release, Pinterest CEO Bill Ready said the company is driving greater returns for advertisers because of its investments in AI and shoppability.

“We’re executing with tremendous clarity and focus, shipping new products and experiences that users want, and in doing so, we’re finding our best product market fit in years,” Ready said.

Digital advertising companies like Pinterest have started growing again after a brutal 2022, when brands reined in spending to cope with high levels of inflation. Meta, Snap and Google parent Alphabet all reported first-quarter results last week that exceeded analysts’ estimates for revenue.

For its second quarter, Pinterest expects to report revenue between $835 million and $850 million, which equates to growth of 18% to 20% year over year. Analysts were expecting revenue of $827 million.

Pinterest will hold its quarterly call with investors at 4:30 p.m. ET.